There is no built-in chat application on the iPhone, but there are a few third party alternatives. Our favorite one is MobileChat, which works with the latest firmware.

You can install it on your iPhone through the Installer module, after adding the content source that points to http://twenty08.com/installer

Once installed, launch it and you'll be prompted to login with your MSN, AOL, ICQ or .Mac account. Once logged in, you'll see your contacts and will be able to chat with them, or add new contacts. The application also supports landscape mode, popup/vibrating/sound notifications, and the ability to change its appearance by installing different themes.